What’s Happening to Mobile in 2016?

July 12, 2016

The mobile phone and computer industry has, as in years past, seen many changes and made great strides in their respective fields. However, recent developments from Apple, Blackberry, OnePlus and Dell have shed light on new issues that could change these industries’ mode of operation. In the murky waters of the post-Brexit economy, Dell, OnePlus and other heavy hitters in the tech industry expect to see a rise in component costs that will inevitably translate to the consumer through pricier gadgets. Unrelated to the Brexit, rumors circulating BlackBerry’s end of mobile handset productions have been addressed and the matter has been more or less put to rest. With the iPhone 7 supposedly just around the corner, many industry analysts and consumers alike are criticizing Apple for stagnating innovation and subpar quality end products. All of these changes in the broader tech market indicate slower growth for certain companies at the very least in the short term. Yet, if these enterprises are able to properly adapt to their market environments, the long term effect should be minimal if not negligible.

Dell, OnePlus and companies operating within similar markets have reported varying increases in their cost of production for many of their staple products, which is, as they postulate, a result of the Brexit spurred GBP-USD imbalance. Much to the chagrin of many UK OnePlus users, their new OnePlus 3 is expected to sell for £329, marginally higher than previously anticipated. For OnePlus and many of its industry rivals, component costs are typically priced in US dollars, making this increase in pricing a necessary change to ensure profitability. Although there are concerns among some UK citizens that this hiked price will remain constant over the next few years, this seems like an unlikely prospect given the apparent bounce back seen over the past couple of weeks. However, at least in the short term, Jim Mackay states, “For virtually everything we [OnePlus] produce, there will be price increases from 1 August.” Turnover is expected to decrease for each of these companies, but that too could be a simple short term disadvantage if the market picks up.

Blackberry classic mobile handsets, once spread across a large market and now relegated to a niche market of businesses, have been rumored to cease production in a few years. While Blackberry has confirmed that they will be phasing out production of their mobile handsets, the company has stated that their production line will remain active so as to meet “warranty exchanges only.” While Blackberry may seem irrelevant to iPhone & Android users, it’s still somewhat popular in its own market. Blackberry is moving on to more “state of the art devices” by presumably constructing phones that resemble the traditional touch screen, keyboard-less models. Blackberry is certainly struggling to compete with more prominent brand names. Despite their relevancy struggles, there is still room for Blackberry to enter the market due to its past success in the industry lending its future products a higher chance to profit.

Lastly, Apple has come under scrutiny for it’s apparent ‘lack of innovation’ in its recent product line. Among those companies to be affected by the Brexit, albeit in a less dramatic manner than OnePlus, Apple’s issue with product durability remains unresolved. Furthermore, with competitors such as Samsung’s Galaxy S7 looming, Apple has to pick up its innovation curve in order to remain the relevant and unique company it is. As of right now, there is no absolute confirmation on the price fluctuations of the upcoming iPhone 7, but that does not mean that there will not be a hike in cost in the wake of the Brexit.

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About the Author

Kabir Khanna

Kabir is an intern in the marketing department at CompuGain, he mainly focuses on managing social media engagement, and studies Math and Economics at Bard College in upstate New York. He’s worked in marketing at multiple other locations, has a keen interest in pursuing a career in consulting, financial analysis, and strategic management. In his academic career, Kabir studies how markets react to specific stresses in the global economy and how to construct enterprise wide strategies for success in those markets. He was an avid debater in high school, taking part in many state wide and national tournaments, and enjoys producing and mixing music as well as tennis in his spare time.

Comments 3

Hi Sally! It’s not just that I believe the iPhone 7 cost will increase as a result of Brexit, it’s those of industry analysts. They believe that the price of smart phones all around will increase in the UK specifically as a result of component cost differences (as mentioned in the article), which are priced in US dollars. It’s a result of just general increases in cost prices as a result of the currency differential — sorry, should have clarified! I will update the blog to include a list of sources!